FXStreet reports that UBS analysts painted a rosier picture for oil prices next year, in the wake of a pick-up in oil demand, as the coronavirus-hit major economies ease lockdown and travel restrictions.

"We therefore expect the oil market to be balanced in third quarter and undersupplied in fourth quarter, and Brent to recover to $43 per barrel by end-2020 and to $55 per barrel by mid-2021.

We still expect oil demand to contract strongly this quarter, though not as much as we did before; we now estimate minus 15 million barrels per day (mbpd) year on year for 2Q, versus minus 20 mbpd previously.

Global oil supply to contract by nearly 6 mbpd year on year in the second quarter, citing forced production shut-ins in North and South America.

Oil demand will likely continue recovering in the second half of this year, adding that consumer changes due to the virus may prevent a quick recovery to pre-crisis demand levels.

On the supply side, with the staggered production cuts winding down, the second half of 2020 will likely start with OPEC ramping up production by 2 mbpd.

Non-OPEC oil production, however, is likely get hit hard by low prices, causing production to be shut in as well in 2H20.

End-of-quarter price forecasts for Brent are $32 per barrel for 3Q20 and $43, $50 and $55 a barrel for the following three quarters."